Facebook's IPO

Of all the recent tech IPOs, none garnered the attention that Facebook got -- and for good reason. But public trading got off to a rocky start, and its sluggish performance has had a ripple effect on other startups.

Of all the recent tech IPOs, none garnered the attention that Facebook got -- and for good reason. It was the biggest Internet IPO in history. Everyone knew the company. Heck, there'd been a Hollywood version made of the company's early story.

People had hoped the Facebook IPO would mark a 1999-like return to IPO mania. Instead, the blockbuster IPO led to lawsuits, losses, and accusations of wrongdoing. Sure, the shares have been doing well of late as the company has won over some skeptics and begun making money from mobile. But Facebook -- coupled with IPO duds from Zynga and Groupon -- has had a ripple effect: Venture capitalists are cutting fewer checks, especially to consumer Internet companies. Why? Facebook has shown that a big IPO isn't easy to pull off, so the big "exits" that backers hope for aren't going to happen anytime soon.

About the author

Paul Sloan is editor in chief of CNET News. Before joining CNET, he had been a San Francisco-based correspondent for Fortune magazine, an editor at large for Business 2.0 magazine, and a senior producer for CNN. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.
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